A review on audits and compliance management

Abstract

Audits are an inevitable part for a good management system. The audits represent one of the most interesting and challenging role of a quality assurance inspector. Audits manage and check whether the regulations are implemented efficiently to achieve set objectives. They help in measuring actions against requirements. Compliance management is a smart and intelligent way of recording and managing the shortcomings so that they can never be repeated. This article stresses the importance of audits and the effective role of compliance management in improving our routine activities for a hurdle free system that in turn can help us in improving a company's profits. It also outlines the effective role of compliance management for the survival of an industry. This article also lays emphasis on the different stages that comprise an audit and the corrective steps that should be taken at every stage so that perfection is achieved in all aspects in a pharmaceutical industry. In short, it gives a briefing on the entire process of an audit and the effective role of compliance management in managing the audit findings for the overall development of an organization.

Full text

Research Article
A REVIEW ON AUDITS AND COMPLIANCE MANAGEMENT
SOWMYA VEDANABHATLA, N. VISHAL GUPTA*
Pharmaceutical Quality Assurance group, Department of Pharmaceutics,JSS College of Pharmacy, JSS University, Sri Shivarathreeshwara
Nagara,Mysore - 570015, Karnataka.Email : vkguptajss@gmail.com
Received: 23 March 2013, Revised and Accepted: 11 April 2013
ABSTRACT
Audits are an inevitable part for a good management system. The audits represent one of the most interesting and challenging role of a quality
assurance inspector. Audits manage and check whether the regulations are implemented efficiently to achieve set objectives. They help in
measuring actions against requirements.
Compliance management is a smart and intelligent way of recording and managing the shortcomings so that they can never be repeated. This
article stresses the importance of audits and the effective role of compliance management in improving our routine activities for a hurdle free
system that in turn can help us in improving a company’s profits. It also outlines the effective role of compliance managemen t for the survival of an
industry. This article also lays emphasis on the different stages that comprise an audit and the corrective steps that should be taken at every stage
so that perfection is achieved in all aspects in a pharmaceutical industry. In short, it gives a briefing on the entire process of an audit and the
effective role of compliance management in managing the audit findings for the overall development of an organization.
Keywords: Audit, Compliance.
INTRODUCTION
An audit can be of enormous benefit to all departments and above all
it provides an excellent opportunity to promote the best type of
quality- one based on prevention rather than detection of errors. An
audit may involve a range of techniques for examination of activities,
materials and records. In all cases the aim is to establish whether
criteria have been met and are being met.
Looking at the example of an emerging market like India, it has
characteristics that make it unique. Firstly, the market is dominated
with branded generics, which make up for 70 to 80 percent of the
retail market. Secondly, a dominant position is enjoyed by local
players who are driven by formulation development capabilities.
Thirdly, prices are low. While India ranks tenth in terms of value
globally, it ranks third in terms of volume. These characteristics
present their own set of opportunities and challenges [1]. As
important as being among the top competitors globally, equally
important is the ‘factor’ which enables it to sustain the severe
competition from its competitors and still remain in the global
market. This factor is nothing other than “quality”- a term most
commonly used and also most commonly overlooked. So when it
comes to scrutiny of quality, audits play a pivotal role in ensuring
that the product meets the standards globally because quality
cannot be imparted but it should be built from the start. Here comes
the role of an audit which helps in checking every intricate aspect of
a product.
Quality audit is mainly used to evaluate all aspects of quality as it is
one of the pivotal factors for a company’s success or failure. They
must be conducted with utmost precaution and all the non-
conformances observed should be pointed and corrected [2]. It is at
this point that compliance plays a very important role as in
healthcare, unlike any other fields a mistake once committed can
cost more than just a recall or a potential market loss. It can cost a
life. Audits also help us in determining whether a process or a facility
is or is not following applicable rules. If rules are violated, the cause
must be determined and ways to prevent future deviations must be
recommended [2].
With recent developments like India opening its drug inspection
office in Beijing to check for compliance with good manufacturing
practices (GMP), it seems quite obvious that the need for audits and
compliance is becoming an everyday need.
Goals of an Audit
The simple goal of this complex process is to evaluate the activities
and existing documentation and determine if they meet pre
determined standards. An audit will evaluate the strengths and
weaknesses of the quality control and quality assurance processes,
the results of which will help us in improving the processes and
build a better system for the benefit of the company [3]. Every
product that is manufactured by a pharmaceutical firm has
characteristics that need to be quantified or qualified by laboratory
testing. Quality control and quality assurance are the necessary
processes that play the role of a check and balance system in a
pharmaceutical industry. They help in examining a system, process
or product against performance standards [4]. Audits help in
providing management with information about how effective a
company is in controlling the quality of their processes and
products. It can also act as a tool to help in increasing the credibility
and substantiate trust and confidence of the customers [5].
Given proper preparation and planning, the audit itself should
achieve its intended purpose with ease. An audit calls for corrective
action. Corrective action aims at eliminating the causes of non-
conformities by focusing on the systematic investigation of the root
causes of non-conformities so that their recurrence can be
prevented [6]. Effective auditing and proper compliance with the
standards will help in building the brand reputation and avoiding
the adverse effects of non-compliance like fines, bad PR, prosecution.
The Audit & Compliance Management can help in ensuring and
demonstrating compliance with internal and external standards,
codes of conduct and procedures while providing real-time visibility
of the compliance profile of an organization. It also enables the
scheduling, planning, and conducting of audits/assessments which
in turn help us in identifying non-conformances and leading to
triggering and tracking of recommendations for improvement [7].
Coming to compliance, assessing compliance might be a simple task
requiring brief inspection to find out whether rules are being
followed or not. Looking at the other extreme, making a judgment
might require extensive research of regulatory requirements,
interpretations before a valid decision is taken. However,
measurement of compliance has presented challenges [8]. So, care
should not only be taken while performing an audit, it is equally
important to manage the next steps like evaluating the risks, arriving
at a decision and managing the changes made for the successful
completion of an audit [1]. To maximize the benefit of auditing
process, findings can be categorized and summarized to allow for
Asian Journal of Pharmaceutical and Clinical Research
Vol 6, Suppl 2, 2013 ISSN - 0974-2441
Vol. 4, Issue 3, 2011
ISSN - 0974-2441
Academic Sciences

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Asian J Pharm Clin Res, Vol 6, Suppl 2, 2013,43-45
44
trend analysis to provide a clear view on status of compliance and
identify opportunities for improvement.
COMPLIANCE MANAGEMENT
The basic motive of compliance management is to ensure that all
employees required for the smooth running of a facility act
responsibly. Therefore, being vigilant about the standards can have
a direct or indirect impact on the products produced. Because to
sustain in the present market situation, it is more important to be
pro active than reactive. Consequently, audits also help in protecting
companies from potential criticism [6].
Compliance management is a central safety management component
that can be effectively performed with integrated, automated data
management tools. This is not rocket science. By acting diligently
and creating complete transparency within an organization, many
hidden risks can be discovered and resolved. The audit program and
the corrective actions taken as a result assure that the company is
operating according to established standards of practice [7].
A compliance program can assist in preparing for the associated
rigors of audit. Just as important, a compliance program can help to
improve employee morale and productivity, and overall business
performance. An effectively run compliance training program can
begin to build and foster a culture of respect, ethical behavior and
compliance.
An audit checks for discrepancies between what is expected and
what is delivered. The difference between these two is what can be
called as “expectation gap”. Compliance management enables
efficient management of the short comings of an audit as every
pharmaceutical company has a commitment to their customers to
provide highest quality drugs.
Proper compliance management also allows easy tracking of non-
conformance rectification thereby leading to corrective and
preventive actions (CAPA). With extensive dashboard and drill-
through reporting, we can easily and instantly report compliance
breaches at a particular site. This is a dynamic practice, because it
can and will change as the needs change [9].
Given below (fig. 1) are the numbers of audit violations found in the
year 2011of an undisclosed company during an audit. From this, it
can be assessed that audits focus into the minutest details of a
facility and hence a high degree of adherence to GMP’s is required
and the need for compliance management for the survival of an
organization.
Figure1: Number of violations during 2011/quarterly [7].
Reasons for an effective audits and compliance management
system
Internal- in order to [10].
 Determine level of compliance.
 Provide a stimulus for continual improvement.
 Build confidence in GMP and QA system.
 Recommend corrective action.
External- in order to [10]
 Establish and monitor capability of supplier or contractor to
deliver goods and services that are fit for purpose.
 Build mutual confidence.
Parameters for evaluation
Before considering the parameters for evaluation, a study
questionnaire was designed to assess the attitude and perception
[11].
The following nontechnical parameters are checked as a part of
audit [9]
NONTECHNICAL
PARAMETERS
TECHNICAL
PARAMETERS
OTHERS
Accuracy of data.
Instrumentation
Customer
satisfaction
Action plans to
correct problems.
Automation of
analytical process
Employee health
and safety.
Adequate training
of analysts.
reliability of
measurements
Timely reporting of
test data.
Proficiency esting
AUDIT STAGES
Each stage of audit has its own set of objectives that are applied to
individual programs with specific operating procedures. Whatever
might be the uniqueness of each audit, all audits majorly consist of
four stages [6,12]:
Figure 2: Audit and compliance management workflow [5].
The findings of an audit can be used to defend legal claims that the
terms of contract are not abided by the company. And if an audit
uncovers a lack of clarity in a company’s procedure of operation,
they can be used to improve the organization’s performance and
prevent any other future allegations [6]. For example, if an audit
First Stage - Engagement plan
 Develop methodology to conduct audit.
 Specify objective measures and documentation that can be used
in judging compliance.
 Design appropriate sampling techniques.
 Employ measures of judging accuracy of computer systems.
Second stage-audit plan
 Develop methodology to conduct audit.
 Specify objective measures and documentation that can be used in
judging compliance.
 Design appropriate sampling techniques.
 Employ measures of judging accuracy of computer systems.
Activities in third stage-field work
Check
 Computerized dispensing records.
 Policies and procedures.
 Provider payment records.
 Quality control plans.
Process of Audit and Compliance Workflow
An audit process (fig. 2) begins with the verification of
adherence with the regulations laid out by regulatory bodies
which is followed by identifying the shortcomings and going for
corrective action and finally followed by checking for
compliance.

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finding states that improper documentation of purchase orders is
found, it might be attributed to unscrupulous employees engaging in
fraud.
FREQUENCY OF AUDIT
In general, the frequency for auditing does not exist. Table (1) gives
an example of a list of criteria which can be used to determine how
often to audit [9].
Table 1:List of criteria for conducting an audit [9].
Factor
High concern
Lower concern
Nature of testing
 Health related
 Routine
 Research



Test methodology
 Custom or new
 Standard


Performance history
 Excellent
 Average


Regulatory audits
 Met
requirements
 Did not meet
requirements


Benefits of audits and compliance can be said as [12]
 Adherence to established standards- following standards will
lead to a product with less defects thereby increasing customer
compliance to the product in the market which results in
increase in profits to the company.
 Increase in employee morale
 Because an audit is performed by an independent person, his
decisions would be unbiased.
 Compliance assessment- the level of compliance to the standards
should be assessed which would play a vital role in the
continuous development process of an organization.
 Validating risk assessment models- risk assessment is a pre
requisite for sustaining any facility and audits provide a chance
to validate the risk assessment models being followed by a
company.
 Identifying emerging issues- any new issues if evolved can be
solved immediately before it becomes a big issue.
 General deterrence
As they say nothing’s perfect, even audits and compliance is like
a double-edged sword with its own set of drawbacks which may
be said as:
 It reveals the current performance of an organization which
might scare off employees and customers if reported that the
organization performance is declining consistently.
 As it is the auditor’s sole call, the decision is totally dependent on
the auditor’s opinion.
 Resource costs: it refers to the labor and support costs that
should be invested for conducting an audit.
CONCLUSION
While a letter to a company notifying an “audit” might not be the
most welcomed news, an audit should be viewed as a management
tool. From a bottom line perspective, audits not only help in the
continual development of an organization but also the profession.
Audits are very much essential to verify the existence of evidence
showing conformance to required processes, to assess how
successfully processes have been implemented, for judging the
effectiveness of any defined target levels and are a hands-on
management tool for achieving continual improvement in an
organization. When employees and managers begin to see audits as
opportunities to improve, they begin to see auditors not as police
officers but as productive members of the organization.
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